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Thursday, October 22, 2020

ORGANIGRAM HLDGS I COM NPV (OTCMKTS:OGRMF) Continues to Press Higher

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ORGANIGRAM HLDGS I COM NPV (OTCMKTS:OGRMF) is a penny play that has grabbed hold of the attention of traders during the stock’s recent charge up the charts. Sentiment has been extremely strong for most of the marijuana sector, but we are seeing special resilience in the Canadian players in the space. Legislative changes have been the shaping force for the sector, but catalysts are suddenly running dry for many cannabis patch plays here in the US. However, north of the border may be a very different situation.

Prime Minister Trudeau of Canada has been on record effectively promising that marijuana would be legalized nationwide in Canada sometime in 2017. And that provides a new catalyst for related equities that is missing for their US brethren, helping to explain why we have not seen nearly as much a sell-the-news reaction in Canadian MJ stocks as we have for US players following the landmark voting on November 8.

ORGANIGRAM HLDGS I COM NPV (OTCMKTS:OGRMF) trumpets itself as a company that produces and sells medical marijuana in Canada. The company was founded in 2013 and is based in Moncton, Canada.

According to company materials, OrganiGram Holdings Inc. is a TSX Venture Exchange listed company whose wholly owned subsidiary, OrganiGram Inc., is a licensed producer of medical marijuana in Canada. OrganiGram is focused on producing the highest quality, condition-specific medical marijuana for patients in Canada.

OrganiGram’s facility is located in Moncton, New Brunswick and the Company is regulated by the Access to Cannabis for Medical Purposes Regulations (“ACMPR”).

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One reason to look closely at this company is the already clear revenue story and the expansionist attitude. For example, the company just announced the closing of its previously announced acquisition of the industrial property adjacent to the Company’s existing facility in Moncton, N.B.

It adds a 136,000 square foot building situated on 10 acres of industrial land and facilitates the Company’s phased expansion initiatives related to cannabis production and extracts processing.

“We are fortunate to be able to consolidate the acquired property with our existing location and transition to the next phase of our expanded production platform immediately. We believe that we have positioned OrganiGram to undertake incremental production and processing capabilities in a timelier manner than most of its competitors. Having a blue-chip tenant occupy the space which we don’t currently require, allows us to execute this expansion more cost effectively and gives us the ability to utilize our newly acquired space in ways that create value for OrganiGram shareholders,” says Denis Arsenault, Chief Executive Officer of OrganiGram.

Another example is the company’s announcement of its completion of its previously disclosed Licensing transaction with TGS International LLC.

“We are pleased to have finalized this transaction and look forward to continuing our work with TGS. Their technological knowledge and cannabis expertise are key for OrganiGram as we continue to focus on maximizing our production yields, streamlining our extraction processes, and continuing to develop and innovate our portfolio of high-quality cannabis products,” says Denis Arsenault, Chief Executive Officer of OrganiGram.

The chart shows 28% piled on for shareholders of the listing during the trailing week. The situation may be worth watching. OGRMF has a track record that includes a number of dramatic bounces. What’s more, the listing has registered increased average transaction volume recently, with the past month seeing just under 240% above its longer-run average levels.

Now commanding a market cap of $204M, OGRMF has a significant war chest ($2.78M) of cash on the books, along with total assets approaching $15M, which must be weighed relative to an appreciable load ($5.65M) of total accumulated debt.

The bottom line is – the balance sheet drag is substantially combatted by a real top line story, as OGRMF is making real money, with trailing revs already coming in at $3.69M. The company is also starting to see major topline growth, with quarterly y/y revs increasing at 685%. We will update this exciting story again very soon. For continuing coverage on shares of $OGRMF stock, as well as our other hot stock picks, sign up for our free newsletter today and get our next hot stock pick!

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